"The Sewerage and Water system is not the problem. You guys are the problem. Lack of leadership, and accountability, that's where the problem is at."
That's the message of one concerned ratepayer at a recent public meeting, called to discuss a pending rate hike by New Orleans' Sewerage & Water Board. This problem agency wants to double your rates.
"I never thought the day would come where I'd see my water bill more than my light bill," the resident told meeting attendees.
While New Orleanians face rising costs to run their water and flush their toilets, what ratepayers don't know about the Sewerage & Water Board has one statewide leader almost at a loss for words.
"I think people should be insulted by it," says state Representative Kevin Pearson of Slidell.
You see, while the Sewerage & Water Board wants you to pay more -- a lot more -- the agency's executive director has made a move to line herself up for a lucrative retirement. While you will likely pay more for water, you'll also be funding quite a bit of money for Marcia St. Martin's retirement.
St. Martin has already locked in her retirement benefit. Whenever she steps down as executive director of the Sewerage & Water Board, she'll receive $175,000 a year -- every year, as long as she lives -- mostly funded by ratepayers.
But there's more.
The Sewerage & Water Board says, in February of 2010, St. Martin entered the Deferred Retirement Option Plan, also known as a DROP plan.
Here's how that works. When she entered DROP, the Sewerage & Water Board calculated St. Martin's retirement benefit, so any future raise cannot be used to get her more retirement money.
When St. Martin entered DROP, she continued to collect her yearly salary. But in a separate account, St. Martin has also started to collect her retirement money through DROP. Each month, the Sewerage & Water Board deposits a nearly $15,000 check in her DROP account. St. Martin can stay in DROP for five years. If she does, when she officially retires, she'll receive a big payment: $877,000.
So think of it this way. If St. Martin retires in 2015, she'll receive that $877,000 lump sum payment and, for her first year of retirement, her benefit of $175,000. So in her first year of retirement, ratepayers will mostly fund more than $1 million of payments to the current executive director.
"It is a very significant, very generous arrangement compared to what most people in the private sector, who are actually paying a lot of the bills, are able to get themselves," says Janet Howard, who heads the Bureau of Governmental Research, a non-profit research group. BGR has spent more than a year looking at retirement systems in the metro area and expects to release a comprehensive report in the spring.
"I think what really is troublesome for people who are not in public sector is… they look at their own lives and how long they're going to be having to work to hold it together. It just raises questions about the fairness, raises questions about the sustainability," Howard says.
All state retirement plans have DROP programs. Not many will have as lucrative a lump sum payment as St. Martin. Janet Howard says 131 current S&WB employees are participating in DROP.
Representative Pearson has led the charge statewide to overhaul retirement systems. "I think we can fix it," he says. "I can't say I know we can."
He says the example with Marcia St. Martin is one of many that can be used in Louisiana, that he says shows a system that needs to be reformed.